Equities edged up Tuesday in quiet trading with small caps leading the winners as they rebounded from Monday's declines. The Dow industrials were flat, the S&P 500 firmed 0.2 percent, and the Nasdaq was up 0.4 percent. US Treasury yields and the dollar rose while oil prices fell.

Markets are largely in wait and see mode with limited news this week while next week features critical US consumer price figures and the Federal Reserve policy meeting.

Rising bond yields restrained the market upside as investors brace for heavy US Treasury debt issuance following the debt ceiling extension. Markets are also contending with liquidity concerns as the US rebuilds its Treasury general account, which tends to drain cash from the banking system.

Among sectors, banks outperformed, especially regionals. Big technology shares mostly rose though megacaps are seeing near-term selling pressure after recent gains. Airlines, homebuilders, retailers, and machinery stocks also beat the market. On the downside, health care, precious metals, aerospace & defense, and food stocks lagged.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.